A new study by Harvard University has placed India ahead of China as the economic pole of global growth. According to the study, maintaining its lead over the coming decade, India will feature on top of the list of the fastest growing economies till 2025 with an average annual growth of 7.7 per cent, for a variety of reasons. “The economic pole of global growth has moved over the past few years from China to neighbouring India, where it is likely to stay over the coming decade,” the Center for International Development (CID) suggested.
The CID is a university-wide center that works to advance the understanding of development challenges and offer viable solutions to problems of global poverty. Here are five key points of the research by the CID
# India has made inroads in diversifying its export base to include more complex sectors, such as chemicals, vehicles, and certain electronics.
# The major oil economies are experiencing the pitfalls of their reliance on one resource. India, Indonesia and Vietnam have accumulated new capabilities that allow for more diverse and more complex production that predicts faster growth in the coming years.
# The projections divide countries into three basic categories — First, the countries with too few productive capabilities to easily diversify into related products. Second, the countries that have enough capabilities that make diversification and growth easier, which include India, Indonesia and Turkey. Third, the advanced countries such as Japan, Germany and the US that already produce nearly all existing products, so that progress will require pushing the world’s technological frontier by inventing new products, a process that implies slower growth.
#The growth projections are based on measures of each country’s economic complexity, which captures the diversity and sophistication of the productive capabilities embedded in its exports and the ease with which it could further diversify by expanding those capabilities.
# Growth in emerging markets is predicted to continue to outpace that of advanced economies, though not uniformly.